That's exactly what the music cataloging service is working on for a few OEMs and we got some hands-on time with a beta version of the software while in Berlin for IFA.
The technology categorizes all the music on your device (in this case a Motorola Xoom) and based on a number of criteria (everything from artist to BPM), automagically groups the songs into different categories.
The UI uses a 10x10 grid with each axis representing a different mood. Looking for upbeat tracks while enjoying a twisty stretch of road? Move the illuminated pointer to Positive and Energetic. Lady-friend just dump you? Bring it down to the lowest point between Dark and Calm. It's very trick, could incorporate streaming music services, is set to arrive in vehicles within the next two years and you can check out our demo video after the jump.